The Hartford is introducing a new practice management program to help financial advisors demonstrate their value in the wake of new federal regulations on the disclosure of fees associated with 401(k) and other defined contribution retirement plans.
"The Practice Management Portfolio is a suite of services and tools to help financial advisors work more proactively with retirement plan sponsors and participants to address a variety of questions and issues related to workplace retirement plans, including those related to plan fees and expenses, and the services they pay for," said Christine Chaia, assistant vice president of marketing for The Hartford's Retirement Plans Group.
"As part of The Hartford's program, we are encouraging advisors to take a comprehensive approach to reviewing the effectiveness of retirement plans with new and prospective clients and, as necessary, recommend ways to improve their performance and efficiency."
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The U.S. Department of Labor earlier this year issued regulations requiring increased plan- and participant-level disclosure of compensation to providers, advisors and other third parties, along with proactive disclosure of expenses for fund management, administration and recordkeeping.
The Practice Management Portfolio provides advisors with several tools to help them identify, explain and capitalize on retirement plan-related expense and operational issues:
- Free access to CustomConsultant, a newly enhanced program that includes an electronic data base to help advisors identify local retirement plans whose sponsors may need assistance with a variety of issues, including high fees, ineffective plan designs, fiduciary or operational concerns;
- A nationwide series of practice management seminars conducted by Tom Foster, vice president and national spokesperson for RPG, to educate advisors about the new disclosure requirements and how to capitalize on related opportunities;
- Materials that provide practical guidance and solutions to help address questions and concerns from sponsors and participants about the new fee disclosure; and
- A sample service agreement that spells out what advisors will do to help sponsors and participants make the most of their retirement plans.
Advisors play an important role in helping business owners and other sponsors evaluate, select, implement and run their retirement plans, Foster pointed out. Advisors should be comfortable discussing and, if possible, documenting the value they provide in helping plan sponsors make good decisions about providers, investment options, plan designs, participant education and other ongoing services. As part of the discussion, advisors can help benchmark fees and performance, and potentially make changes as appropriate, he added.
"The new DOL regulations are ushering in a new era of transparency in the retirement plans marketplace, which is good news for everyone," Foster said. "But discussions about money can sometimes be awkward. The Hartford's Practice Management Portfolio is designed to help this new era start smoothly by highlighting the value and importance of financial advisors in recommending, implementing and servicing retirement plans."
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